The effects of firm specific incentives (stock options) on mobility and employee entrepreneurship
Devarakonda,S.V. Chila,Vilma
Devarakonda,S.V.
Chila,Vilma
Abstract
We consider the effect of employee stock options on employee mobility and employee entrepreneurship. Employee stock options are firm-specific, long-term, equity-based incentive instruments—attractive properties for affecting employee behaviors and decisions. We argue that employee stock options reduce employee mobility levels. By contrast, we posit that employee stock options increase employee entrepreneurship levels, and even more so when a firm's knowledge scope is narrow. Using the semiconductor industry as the setting, we document not only the negative effect of employee stock options on employee mobility levels but also the positive impact on employee entrepreneurship levels; the positive impact is also more substantial in firms with a narrow knowledge scope. We contribute to the literature that examines the influence of organizational conditions on the origins of entrepreneurship. We also inform research on strategic human capital by explicating the divergent effects of firm-specific incentives on two crucial human capital outcomes for firms.
Description
Publisher Copyright: © 2024 The Authors
Date
2024-05
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Volume Title
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Research Projects
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Keywords
firm specific incentives, employee entrepreneurship, employee stock options, SDG 8 - Decent Work and Economic Growth
Citation
Devarakonda, S V & Chila, V 2024, 'The effects of firm specific incentives (stock options) on mobility and employee entrepreneurship', Journal of Business Venturing, vol. 39, no. 3, 106382. https://doi.org/10.1016/j.jbusvent.2024.106382
License
info:eu-repo/semantics/openAccess